Are Work Guarantees Hurting the Franchise Industry?

Work guarantees have become a familiar selling point across many Australian and New Zealand franchise systems, especially in service-based industries like cleaning, maintenance, and home services. These guarantees are often marketed as reassurance for new franchisees, promising a certain level of income during the start-up phase.

But do these guarantees actually help build sustainable franchises, or are they damaging the industry by creating false expectations? While the idea of a guaranteed income sounds appealing, poor communication and unrealistic promises often turn what should be a safety net into a source of frustration and mistrust.

At TMPlus | Tereza Murray Franchising, we have seen how poorly structured guarantees can erode relationships between franchisors and franchisees. What begins as a promise of stability can quickly lead to disputes when expectations do not match reality.

What is a work guarantee in franchising?

A work guarantee is a commitment by the franchisor to ensure a minimum level of income or work for a franchisee, typically during the early months of operation. It is often presented as protection while the franchisee builds their customer base.

In theory, the concept is reasonable. It gives franchisees confidence that they will earn enough to cover initial costs while learning the business. In practice, however, many guarantees come with complex conditions that are not always clearly explained.

For instance, franchisees may be required to:

• Accept every job offered, regardless of travel distance or convenience.

• Be available at all times, including weekends and evenings.

• Pay administration or lead-generation fees that reduce the guaranteed amount.

• Avoid any customer cancellations or complaints that could void payments.

The challenge is not the existence of a guarantee itself, but how it is structured, delivered, and communicated. When terms are unclear or unrealistic, what begins as reassurance often ends in disappointment.

Do work guarantees actually help franchisees succeed?

When guarantees are genuine and based on secured client work, they can help franchisees ease into their business confidently. For example, if a franchisor has confirmed contracts or recurring clients, a guarantee may provide real income stability.

However, many systems rely on projected or anticipated work that may never eventuate. In those cases, franchisees are promised consistent earnings but receive far less, sometimes months later or not at all. This not only impacts their financial stability but can also damage the franchisor’s reputation.

Another issue is dependency. Franchisees who rely on guaranteed income may not develop strong sales or marketing habits. They can become reliant on head office to supply work rather than learning how to generate their own leads and maintain customer relationships. In contrast, franchisees who build their customer base from the outset usually achieve stronger long-term results and greater independence.

Why do franchisors offer work guarantees?

For many franchisors, offering a guarantee feels like a competitive necessity. Franchise candidates often ask about income security early in recruitment discussions, and guarantees can make an offer seem more attractive.

Unfortunately, guarantees are sometimes used more as marketing tools than as genuine business support mechanisms. While they might help close a sale, they can create unrealistic expectations that are difficult to manage later.

Franchisors who avoid guarantees often choose to provide structured onboarding, marketing support, and lead-generation systems instead. By helping franchisees win and retain their own clients, they build stronger engagement and long-term satisfaction across the network.

At TMPlus, we have seen that brands built on capability rather than promises tend to attract higher-quality franchisees who are genuinely committed to their success.

What risks come with offering unrealistic work guarantees?

Work guarantees can expose franchisors to a range of problems if not handled carefully. Some of the most common risks include:

• Franchisees feeling misled when actual income does not match what was promised.

• Increased disputes between franchisor and franchisee, especially around deductions or missed payments.

• Higher turnover rates as disappointed franchisees exit early.

• Brand damage when word spreads that the guarantee was not as advertised.

These risks are especially high when guarantees rely on forecasted work rather than confirmed clients. Once trust is broken, even the best training or support cannot repair the relationship easily.

Guarantees can also attract the wrong type of franchisee. Candidates looking for guaranteed income may treat the business more like employment than ownership, which weakens the culture of independence and accountability that strong franchise networks rely on.

What should franchisors do instead of offering guarantees?

Instead of offering income guarantees, franchisors can achieve far better results by focusing on strong systems, training, and support that empower franchisees to succeed on their own.

Effective alternatives include:

• Marketing and lead-generation systems: Provide proven methods for generating consistent, high-quality leads.

• Sales and quoting training: Teach franchisees how to convert enquiries into ongoing customers.

• Customer retention systems: Help franchisees build recurring revenue through strong relationships and service standards.

• Transparent performance tracking: Set measurable goals and provide feedback to help franchisees grow their income independently.

These approaches create confidence without making unrealistic promises. They also encourage a sense of ownership, as franchisees understand that their results depend on their efforts within a proven framework.

When franchisors shift from promising income to providing capability, they build stronger, more resilient networks that are sustainable long after the start-up phase.

How should franchisors communicate around income and work security?

The key to avoiding disputes is transparency. Franchise candidates should always understand how income is generated, what is required to achieve it, and what level of support they will receive.

During recruitment, franchisors should clearly explain:

• How leads are generated and distributed.

• What performance expectations are attached to any financial commitments.

• What costs, such as admin fees or marketing contributions, may affect income.

• That income ultimately depends on the franchisee’s effort and engagement.

When these details are discussed early and documented accurately, franchisees join the network with realistic expectations and a clear understanding of what success looks like.

Conclusion

Work guarantees might appear to offer reassurance, but when they are not backed by real, secured work, they often harm rather than help. They can create dependency, lead to conflict, and attract the wrong type of franchisee.

The most successful franchise systems focus on empowerment, not promises. With strong marketing systems, structured training, and transparent communication, franchisors can build networks that thrive on trust and shared accountability.

At TMPlus | Tereza Murray Franchising, we believe sustainable success comes from capability, not guarantees. Our approach helps business owners design franchise models that are transparent, profitable, and built to last. To learn how to develop a franchise system that grows without unrealistic promises, visit www.tmplus.com.au.